Gaming Commission drops three counts against Binion

Friday, Feb. 27, 1998 | 10:07 a.m.

CARSON CITY -- The state Gaming Commission voted Thursday to dismiss three counts of a five-count complaint against Las Vegas casino owner Lonnie "Ted" Binion, who is trying to hold on to his 20 percent interest in the Horseshoe Club, a downtown Las Vegas hotel-casino.

But the commission denied other motions by Binion's lawyers who sought records for a list of state-licensed casino executives who are felons and to subpoena one regulator as a defense witness.

The commission will begin a hearing March 23 in Las Vegas on charges that Binion associated with the late Herbie Blitzstein, an underworld figure, and that Binion loaned money to Peter Ribaste, who was convicted of mail fraud.

The commission must decide whether to revoke Binion's gaming license which he has held since 1964.

After the Thursday hearing, Binion's attorney Mark Ferrario said he was pleased with the partial dismissal of the complaint. He said he and co-counsel Richard Wright still plan to introduce evidence to the commission that there are people holding state gaming licenses who have done worse things than Binion.

The commission agreed with the defense to dismiss two counts against Binion that he had permitted his girlfriend Sandy Murphy, a former topless dancer, to smoke marijuana in his Las Vegas home. Murphy also was supposed to be under house arrest at Binion's home on a drunk driving charge from California but she did not serve all her time at his residence.

At the request of the state Gaming Control Board that filed the complaint, the commission also dismissed a count that Binion violated regulations by his arrest in an altercation with Woodward, a gas station attendant in Las Vegas. The criminal charges against Binion were later dropped when it was determined Woodward was not telling the truth.

Deputy Attorney General Kirk Hendrick said the board still believes there may be a violation of regulations but Woodward "is less than a credible witness."

The commission supported a motion by Hendrick to stop lawyers for Binion from calling Gaming Control Board member Steve DuCharme as a witness at the hearing. DuCharme formerly worked as an undercover agent for the Las Vegas Metropolitan Police Department and had accepted an $800 bribe from Blitzstein as part of the covert operation.

No charges concerning the bribe were ever brought against Blitzstein, reportedly a top lieutenant of slain Chicago underworld figure Tony "The Ant" Spilotro. Blitzstein was nominated for inclusion in the state's Black Book in December 1996.

Ferrario said he wants to question DuCharme about his relationship with Blitzstein in the 1980s and why the board waited until 1996 to list him among unsavory individuals who are banned from Nevadabmer

was charged with other crimes., B.

He also said he wanted to know why DuCharme never disclosed his Blitzstein relationship to Binion before it came out in the newspapers in Las Vegas.

But Hendrick argued successfully there was "executive privilege" extended to DuCharme. He said it would be "an infringement' on the board's right to keep secret its mental process in bringing complaints against gaming licensees.

DuCharme is one of the three members of the board to sign the complaint against Binion.

Hendrick also got the commission to block the defense motion to require the board to disclose how many gaming licensees had been convicted of felonies. Ferrario and Wright want to show that there are persons in the industry with far worse records than Binion who has been convicted of a gross misdemeanor drug charge.

Ferrario said he may be able to get this into evidence in another way at the hearing. At one point, Ferrario said, "I have represented people with felony convictions who got licensed." The defense is trying to make the point that the board is singling out Binion for disciplinary action while allowing others, with worse records, to operate.

Hendrick said the board does not have that list of those with felony convictions available.

The commission also accepted Hendrick's argument to prohibit an expert witness testify for Binion at the hearing next month. Ferrario said he wants to present Jerry Lopez, an expert on constitutional law, to tell the commission "what's wrong with some gaming regulations in Nevada."

But Hendrick said experts can't testify on rules of law, only on the facts of the case.

In other action, the commission accepted an agreement for Vintage Slot Machine and Amusement Company and its present Rudolph J. Lewis of Las Vegas to have their licenses revoked. Lewis will also pay a $10,000 fine and an additional $4,612 to reimburse the state for investigative costs.

Lewis was involved in a covert scheme to sell slot machines to an off-limit Indian Reservation in California for which he received $42,000. He also tried to hide part of the money by depositing it in $5,000 segments in a bank so he would not have to report it to state authorities.

Lewis pleaded guilty in a federal court in California to illegal transportation of video slot machines and will be sentenced next month. As part of the plea bargain, he agreed to have his Nevada licenses revoked.

His wife Sharon Lewis, an officer in the corporation, was not involved in the day-to-day operation and she surrendered her license.

Lewis did not admit to the counts in the complaint but agreed to the penalty.